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Front Page » Business & Finance » Gables firm, Egypt partner for grain security

Gables firm, Egypt partner for grain security

Written by on February 18, 2015

Coral Gables-headquartered Blumberg Grain is partnering with Egypt to develop one of the world’s largest food security systems for grain storage.

The company, which signed a contract with the Egyptian government late last year, is currently developing 93 wheat storage facilities across Egypt and expects the first few to be completed by the end of April, said David Blumberg, CEO of Blumberg Grain-West Africa.

He told Miami Today the facilities will process 3.7 million tons of wheat annually and store 750,000 tons, saving Egypt about $200 million a year.

“Post-harvest wheat loss in emerging markets is the primary problem for governments to solve,” Mr. Blumberg said. “The loss, between harvest and first sale, is about 50% and due mainly to the lack of storage containers.”

That’s the ultimate goal of the Blumberg Grain project: to support the Egyptian government in recovering crops lost to post-harvest fatality.

Egypt is the world’s largest importer of wheat and Africa’s largest producer. However, there are numerous threats to grain in Egypt and other emerging countries, including pest attacks, rot, and theft – or what is referred to in the industry as “leakage.” This leakage is often distributed to thieves’ friends and family who sell the wheat on the black market.

Currently, Mr. Blumberg said, Egypt’s wheat is stored in open-air storage facilities called shounas. He explained the wheat is received from farmers in bags and then stacked in piles, thus exposed to the sun and elements.

“There’s a high likelihood that it will go bad due to the weather,” Mr. Blumberg said. “The Egyptian pigeon is the worst pest and responsible for about 20% of the loss.”

In addition to creating new static storage capacity for the wheat in Egypt, Blumberg Grain’s project will enable screening, drying and grading capabilities for the wheat. Once the 93 modern storage facilities are completed, Mr. Blumberg said, it will be one of the world’s largest and most sophisticated integrated food security systems for grain storage.

According to Blumberg Grain literature, it is one of President Al-Sissi’s “mega projects” and integral to his vision of positioning Egypt as the trade hub of the Middle East and North Africa region.

“In areas where food security is a problem, national security is at risk,” said Mr. Blumberg. “We have people working in our Cairo office now and have safeguards within our corporate policy to protect our employees.”

Egypt is the most populated country in the Middle East and the third most populous African country. According to OECD/World Bank statistics, the population in 2014 was 84 million.

Bread forms the backbone of Egyptian cuisine, according to “Food and Feasts in Egypt” by Richard Balkwill, and is consumed at almost all Egyptian meals.

Blumberg Grain was established in 2010. A separate corporate subsidiary of Blumberg Capital Partners, it has its headquarters in Coral Gables with offices in Washington; Chicago; Ames, Iowa; and Cairo.

Mr. Blumberg said the idea for the company came from his father, Philip Blumberg, founder of Blumberg Capital Partners, who was evaluating projects for commodities funds and learned about post-harvest losses in emerging markets.

“It was my father’s expertise in real estate and development that he was able to translate and get this project off the ground,” Mr. Blumberg said.

Blumberg Capital Partners, founded in 1979, raises investment capital for projects around the world. Projects include management of real estate in the US, steel fabrication in Africa and engineering research at its center in Ames, Iowa.

In addition to the project in Egypt, Mr. Blumberg said, Blumberg Grain is working in Nigeria on a cold storage facility for fruits and vegetables, as well as for corn storage in the Democratic Republic of the Congo and a rice storage facility in Senegal.

Looking to the future, he said Blumberg Grain is looking to build a manufacturing plant and export hub to produce food security technology and systems, including equipment and storage buildings for the Middle East and North Africa region.